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[2012] ZALCJHB 148
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Bambelela Bolts (Pty) Ltd v Ball and Another (J 2977/11) [2012] ZALCJHB 148 (1 March 2012)
REPUBLIC
OF SOUTH AFRICA
THE LABOUR COURT OF
SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Not Reportable
Case No: J 2977/11
In the matter between:
BAMBELELA BOLTS (PTY)
LTD
.............................................................................
Applicant
and
TREVLYN BALL
...........................................................................................
First
Respondent
ACTION BOLTS (PTY)
LIMITED
............................................................
Second
Respondent
Heard: 13 January 2012
Delivered: 1 March
2012
Summary:
The first respondent was
employed by the applicant until she resigned in October 2011 and took
up employment with the second respondent.
The applicant approached
this court for an interdict on the basis that by working for the
second respondent, the first respondent
was acting in breach of a
restraint of trade agreement between the applicant and the first
respondent.
Held
for a restraint of trade
agreement to be enforceable it must not just protect a former
employer from competition in the industry
it operates in. It must
protect confidential information which consist of not only knowledge
in the public domain which the employee
would have acquired by
working in the industry the former employer operates in but knowledge
the employee would not have acquired
had he/ she not been employed by
the former employer. The knowledge must be capable of being used by
the former employer’s
competitor to its advantage and to the
former employer’s detriment.
The employee’s constitutional right to choose
his/her trade, occupation and profession freely must be considered in
determining
the enforcement of a restraint of trade agreement
. It must also be determined whether the contract in
restraint of trade affects the employee’s future employment in
the area
of his/ her expertise.
____________________________________________________________________
JUDGMENT
______________________________________________________________________
LALLIE J
[1] The applicant
approached this Court on an urgent basis for an order in the
following terms:
‘
2 Ball is
restrained from being employed by, conducting business with, or
associating herself directly or indirectly whether as
partner,
proprietor, shareholder, director, member, consultant, or otherwise
with any supplier, manufacturer, wholesaler or retailer
of any
products stocked, supplied or sold by Bambelela during the six months
prior to 28 October 2011.
3 The restraint endures for a period
of one (1) year from the 28
th
of October 2011 and applies
within the provinces of Gauteng, Mpumalanga, Free State, Limpopo and
North-West.
4 Action Bolt is ordered to terminate
the services of Ball with immediate effect.’
[2] Only the first
applicant opposed the application. On 13 January 2012, I granted an
order in favour of the applicant. The following
are brief reasons for
the order.
[3] It is common cause
that the first respondent was appointed by the applicant as an
internal sales consultant on 1 February 2010
after she had worked for
the applicant on a fixed term contract from September 2009. She dealt
directly with customers and her
duties included quotations, sourcing
costs and stock, internal sales, cold calling customers, keeping
customer/ supplier information
up to date. Although the first
respondent denied ever handling exports, during argument she conceded
having dealt with exports.
[4] It is common cause
that the parties entered into a restraint of trade agreement part of
which restrained the first respondent
from being employed by a
business trading in competition with the applicant for a period of a
year after her resignation from the
applicant, in Gauteng,
Mpumalanga, Free State, Limpopo and the North-West. The first
respondent resigned from the applicant and
took up employment with
the second respondent which is the applicant’s competitor in
breach of the restraint of trade agreement.
The applicant submitted
that after joining the second respondent, the first respondent
contacted National Socket Screws one of
the applicant’s
suppliers as well as Bascol Manufacturing Engineers, a client of the
applicant. According to the first respondent
both entities she
contacted are suppliers which had dealings with the second respondent
since 1983, long before she became its
employee.
[5] The first respondent
denied that when working for the applicant she was privy to
information which could prejudice the applicant
when disclosed to the
second respondent. She denied taking any information from the
applicant and submitted that she joined the
second respondent because
it offered her the better remuneration she needs as she is in
financial difficulties. Her main argument
was that the order sought
by the applicant should be denied because should it be granted her
right to work, earn an income and
support her children would be
violated.
[6] One of the
requirements for the enforcement of a restraint of trade contract is
that it must protect some proprietary interests
for the person who
seeks to enforce it. The interest may take the form of trade secrets,
confidential information, goodwill or
trade connection. In this
regard see
Townsend Productions (Pty) Ltd v Leech and Others
2001 (4) SA 33
(C). It was confirmed in
Advtech Resourcing (Pty)
Ltd t/a The Communication Personnel Group v Kuhn and Another
[2007]
JOL 20689
(C) that an employer’s protectable interests include
trade secrets, confidential information, and customer goodwill or
trade
connection.
[7] The applicant argued
that it has a protectable interest in the form of confidential
information. Such information includes tailor
made supplier deals
between the applicant and its local and international suppliers and
is not in the public domain. The applicant
also submitted that the
first respondent has knowledge of its pricing structure and profit
margins, information which would give
the second respondent an unfair
advantage in the market. The first respondent argued that she has no
intention of using any information
she acquired as an employee of the
applicant to advance the business of the second respondent.
[8] In determining
whether the information the applicant sought to protect by the
restraint of trade agreement is confidential and
constitutes trade
secrets I have considered the following test relied on in
Advtech
Resourcing (supr
a):
‘
... before
information can qualify as a trade secret, it needs to comply with
three requirements:
1.
The information must not only relate
to but also be capable of application in the trade or industry.
2.
The information must be secret or
confidential. The information must accordingly – objectively
determined only be available
and thus known to a restricted number of
people or to a close circle, or as is usually expressed, the
information must be something
which is not public property or in the
public knowledge.
3.
Finally, the
information, objectively viewed, must be of economic or business
value to the plaintiff. Van Heerden & Neethling
Unlawful
competition
(1994)
at 225.’
1
[9] Information which
falls outside the realm of information which can be protected by a
restraint of trade agreement is defined
in
Aranda Textile Mills
(Pty) Ltd v Hurn
[2000] 4 All SA 183
(E) as knowledge and skill
in the public domain, which a workman may otherwise have gained.
[10] Terms of specialised
supplier deals put in place by the applicant with the applicant’s
local and international counterparts,
the applicant’s pricing
structure and profit margins are certainly not in the public domain.
It is information the first
respondent would not have acquired had
she not worked for the applicant. Knowledge of the pricing structure
and profit margin places
a competitor of the applicant in a position
to tailor make its own pricing structure and profit margin to its
advantage and to
the detriment of the applicant. As a sales
consultant, the first respondent developed goodwill with customers.
She got to know
which client ordered which product and in what
quantities. That kind of information is not in the public domain. The
applicant
stands to be prejudiced should the first respondent be
allowed to pass it to the second respondent. The applicant does not
seek
protection just from competition in the industry.
[11] I have also
considered the first respondent’s right in terms of section 22
of the Constitution to choose her trade and
occupation or profession
freely. The industry the first respondent works in is not her field
of expertise. It is common cause that
she has worked for nine years
as a conveyancing secretary and for seven years in internal sales at
Fiber Centre Africa (Pty) Ltd.
[12] In the
circumstances, I found that the first respondent has knowledge of the
applicant’s confidential information and
the continued
employment of the first respondent by the second respondent exposes
the applicant to the prejudice it sought to protect
itself from by
concluding a restraint of trade agreement with the first respondent.
[13] It is for the above
reasons that the order in favour of the applicant was granted on 13
January 2012.
_________________
LALLIE J
Judge of the Labour Court
APPEARANCES:
FOR THE APPLICANT: Ms
Dippenaar of Du Randt Du Toit Pelser Attorneys
FOR THE FIRST RESPONDENT:
Ms Ball (In person)
FOR THE SECOND
RESPONDENT: No appearance
1
Advtech
Resourcing
at para 51.